The Federal Energy Regulatory Commission on Tuesday declined to accept Commonwealth Edison's attempt to cancel a transmission security agreement tied to a 1.8-gigawatt, $20 billion data center project in Joliet, Illinois, developed by PowerHouse Hillwood Holding. The decision, issued Sept. 22, 2026, leaves a contract dispute centered on credit requirements in the hands of federal district court. At the heart of the disagreement is PowerHouse Hillwood's claim that it satisfied the agreement's initial credit requirements by posting just $1 in collateral, according to FERC's decision.
The commission chose not to assert jurisdiction over the contract's ambiguous language, stating that federal courts can resolve the matter just as effectively as the agency. The case is currently pending in the U.S. District Court for the Northern District of Illinois, according to the decision. FERC Chairman Laura Swett and Commissioner Lindsay See emphasized in a joint statement that their decision not to take the case doesn't diminish their "commitment to fair cost allocation, ratepayer protection, and regulatory clarity." Commissioner David Rosner pointed to the dispute as evidence supporting FERC's June show cause orders, which directed regional transmission organizations and independent system operators to create standardized cost-recovery agreements for large loads. Regional transmission organizations and ISOs face a mid-November deadline to respond to those orders.
Commissioner David LaCerte sharply criticized the $1 letter of credit at the center of the dispute. "The idea that $1 may provide appropriate security to any such agreement strikes me as an embarrassing legal fiction," LaCerte said. He called the arrangement "insulting to the underlying ratepayers, stakeholders, and the grid itself that bear the real risk of this project," adding that treating such risk as "collateralizable for less than the price of a cup of coffee" trivializes the obligations the guarantee is supposed to secure. Rosner separately noted that requiring security deposits "helps ensure both project viability and transparency" while keeping project risks with developers rather than the public.
Swett and See used the case to underscore what they called the "criticality" of reforms proposed in FERC's large load interconnection show cause orders from June. The commissioners stated that developing "clear and consistent" terms for connecting large loads to the transmission system is crucial, as is ensuring that regional transmission organizations, independent system operators, and their transmission owners can propose standardized cost recovery agreements. They emphasized the importance of agreements containing "strong, consistent language that both protects customers from improper cost shifting and provides certainty to contracting parties." The case highlights a growing tension as massive data centers seek grid connections: without clear rules on credit requirements and cost allocation, utilities and ratepayers could end up bearing financial risks for projects that may never come online, while developers face uncertainty about what security they must actually provide.